Kennedy v. Cummings

BISHOP, Judge. Appellants, John R. Kennedy (“Kennedy”) and Mary A. Kerig (“Kerig”), his wife, appeal from a decision of the ²³ Circuit Court for Charles County (Nalley, J.) setting aside a Decree that, inter alia, vested in Kennedy absolute title in fee simple to certain unimproved real property in Charles County that he purchased at tax sale. Issue Appellants present the following issue: I. Can proper compliance by Appellants with the tax sale foreclosure procedure required by the Tax Property Article of the Annotated Code of Maryland still result in constructive fraud on their part so as to relieve them of the knowledge attributed to them by Section 14-839(b) of the Tax-Property Article of the taxes and the consequences for non-payment of the taxes? Appellees raise the following additional issue in their brief: II.

Does failure to comply with Maryland Rule 2-202(c) render the August 7,1990 Decree void for lack of jurisdiction? Facts On May 17, 1988, the Treasurer for Charles County, Maryland sold to appellant Kennedy for the sum of $3,100 certain real property located in Charles County and described as Lot 1, Knotts Subdivision, West Glymont, Town of Indian Head, for the failure to pay $116.44 in county taxes assessed to Annette M. Cummings and Lisa R. Carter. A Certificate of Sale was issued stating that after November 18, 1988, a proceeding could be brought to foreclose all rights of redemption on the property. On May 4, 1990, Kennedy filed a Complaint to Foreclose Right of Redemption naming, inter alia, appellees as defendants.

Accompanying the complaint was an affidavit of search in which counsel for appellants stated that she had: cause[d] a forty (40) year title search to be undertaken of the properties described in this action, including the Land Records of Charles County, Maryland, the records of the Register of Wills for Charles County, Maryland, and the ²⁴ records of the District and Circuit Courts for Charles County, Maryland, both law and equity, and [that she] included as parties to this action all owners of record of said properties, all mortgagees and all lien and judgment holders as described by said title search, and that all such parties shall be duly notified as required by Section 14-838 of the Tax-Property Article[.] An Order of Publication was filed on May 7, 1990 ordering that notice be given warning all defendants and all persons having or claiming interest in the property to appear and redeem the property by July 9, 1990 or thereafter a final decree foreclosing all rights of redemption and vesting title in Kennedy free of encumbrances would be rendered. On June 18, 1990, counsel for appellants filed an affidavit of non-est service stating that she had mailed, by certified mail return receipt requested, copies of the Subpoena, Complaint to Foreclose Right of Redemption, and Order of Publication to appellees. The mailing addresses listed on the affidavit for both appellees was 5804 Annapolis Road, #704, Bladensburg, MD 20710. This was the address for appellees as shown on the tax rolls for Charles County.

The affidavit indicated that both letters had been returned marked “Return to Sender — Moved—Not Forwardable.” Counsel for appellants further certified: I have made the following attempts, pursuant to section 14-839(4) of the Tax-Property Article ... to locate [appellees], and have failed to discover any further information as to their present whereabouts: 1. Review of the Land Records for Charles County, Maryland. 2. Review of the Circuit Court records for Charles County, Maryland. 3. Review of the records of the Office of Assessments and Taxation for Charles County, Maryland. 4.

Review of the records of the Office of the Treasurer for Charles County, Maryland. Also on June 18, 1990 counsel for appellants filed a Certificate of Publication certifying that the Order of Publication ²⁵ was published once a week for at least three successive weeks in the Maryland Independent, a newspaper in Charles County. The date for redemption having passed, the circuit court on August 7,1990 issued a Decree vesting in Kennedy absolute fee simple title in the property. In addition, the Decree ordered that: 1) the Treasurer for Charles County execute a deed to the property to Kennedy upon proper payment; 2) the Supervisor of Assessments enroll Kennedy as owner in fee simple of the property; 3) the Decree was final and conclusive and binding on appellees; and 4) the clerk issue certified copies of the Decree to the Treasurer and the Supervisor of Assessments for Charles County.

A Deed was executed by the Treasurer for Charles County on November 16, 1990 transferring title to the property to Kennedy and Kerig, his wife, as tenants by the entireties. The Deed was duly recorded in the land records for Charles County. On January 17,1991, appellees filed a Motion Pursuant to Maryland Rule 2-535(b) claiming that Kennedy had committed constructive fraud in obtaining the final Decree. Appellees explained in their motion that the property is located within the Town of Indian Head, and that the Town tax bills were received and paid by appellees.

The appellees’ new address of 6 Summit Court, Indian Head, Maryland was properly listed on the Town tax rolls. Appellees maintained they never received the county tax bills for the time period in question and “were under the impression that having paid the [city] tax bill they did receive that there were no other and further taxes due and owing.” Apparently appellees were confused about their tax bills as a result of the annexation of their property to the Town of Indian Head. Appellees further stated in support of their motion: 10. That had [Kennedy] upon discovery that the real property taxes for the Town of Indian Head were paid should have made further inquiry to determine the address of the [appellees] so as to give them actual notice of this proceeding. ²⁶ 11.

That had [Kennedy] performed a title examination of the land records in accordance with generally accepted standards he would have discovered the [appellees] current address. The Rule 2-535(b) motion also stated that appellee Lisa Roxanne Carter is a minor. In their prayer for relief appellees requested: 1) the circuit court exercise its revisory power over the Decree and set it aside and declare the Deed from the treasurer to Kennedy and Kerig null and void; 2) appellees be allowed to redeem the property from the effects of the tax sale; 3) a hearing be scheduled on the motion; 4) a show cause order be issued requiring Kennedy and Kerig to show cause why they should not be barred from selling the property; 5) Kerig be joined as a party; and 6) appellees be granted other and further relief as their cause required. A Show Cause Order was issued and a hearing was scheduled for March 26, 1991 on the Rule 2-535{b) motion.

Following a non-evidentiary hearing, the court granted appellees’ motion and set aside the Decree. The court stated in support of its action: I conclude that these parties by reason of the Indian Head annexation and the Indian Head billing for taxes put these parties in a position of not being able to realize or not realizing in fact that other taxes were due and that there was a consequence attaching to their non payment. [From w]hat I am told here[,] these parties were getting a tax bill and were paying a tax bill. Had they not been doing so I would conclude that they were chargeable with notice that something unpleasant even as unpleasant as a tax sale [was a] likely consequencef ]. I don’t think we can read paragraph b [§ 14-839(b) of the Tax-Property Article] ... without giving effect to that clause.

It is a qualifier and a limiter. So I am going to grant that motion and set aside the de[c]ree. We shall affirm the decision of the circuit court setting aside the Decree, albeit for reasons different from those enunciated by the circuit court. ²⁷ Discussion Prior to addressing the merits, we mention a procedural point regarding the proper parties to this appeal. The complaint in this matter lists John R. Kennedy as the only plaintiff.

The Decree issued by the circuit court vested absolute and indefeasible title in fee simple in the property in “the Plaintiff,” and further ordered the Treasurer for Charles County to execute a deed to the property to “the Plaintiff.” The only plaintiff was Kennedy. Nevertheless, the County Treasurer executed a Deed conveying the property to “John R. Kennedy and Mary A. Kerig, his wife, as tenants by the entireties[.]” The caption in the pleading noting an appeal to this Court reads: “John R. Kennedy, Plaintiff, and Mary A. Kerig, Interested Party.” In their briefs, however, the parties designate both Kennedy and Kerig as appellants. By virtue of her ownership of the property, Kerig is a necessary party. Bachrach v. Washington United Coop., 181 Md. 315, 318 , 29 A.2d 822 (1943) (“It is a fundamental rule that all persons interested in the subject matter of a suit must be made parties to it[.]”).

We treat Kerig as an appellant for the following reason. Appellees in their Motion Pursuant to Maryland Rule 2-535 requested that Kerig be joined as a party. The circuit court granted this motion and set aside the Decree. By granting the motion, the circuit court granted appellees’ request that Kerig be joined as a party.

She is, therefore, a proper appellant in this appeal. The Merits I. In the recently decided case of St. George Antiochian Orthodox Christian Church v. Aggarwal, 326 Md. 90 , 603 A.2d 484 (1992), the Court was called upon to balance the competing interests of property owners and purchasers at tax sale. This case requires us to perform the same task. At issue is whether appellants were required to examine the tax records of the municipality of Indian Head in order to fulfill their statutory obligation under Md.Tax- ²⁸ Prop.Code Ann. § 14-839(a)(l), which required appellants to notify appellees of the sale at appellees’ last known address, as obtained from “any records examined as part of the title examination.” We hold that appellants were required to examine the municipal tax records.

We explain. In 1986, the legislature made extensive changes to the laws governing tax sales. 1986 Md.Laws ch. 825. These changes, to which we refer infra, included decreasing the time, from 1 year and a day to 6 months, that a purchaser must wait after tax sale to file a compliant to foreclose all rights of redemption, and enunciating a procedure by which a plaintiff is to obtain the last known address of each defendant listed in the complaint to foreclose the right of redemption. In Aggarwal , the Court discussed that the changes were intended to “provide greater protection for due process by facilitating notice of tax sales of property in the State.” Summary of Committee Report, Senate Judicial Proceedings Committee, p. 3, Id., at 96 , 603 A.2d 484 .

Section 14-836(b) of the Tax Property Article sets forth who must be named as a defendant in a suit to foreclose the right of redemption. The language we have emphasized was added in 1986: (b) Except as otherwise provided in this subsection, the defendants in any action to foreclose the right of redemption shall be: (i) the record title holder of the property as disclosed by a search performed in accordance with generally accepted standards of title examination of the land records of the county, of the records of the register of wills of the county, and of the records of the circuit court for the county[.] 1986 Md.Laws ch. 825. Section 14-839, dealing with notice to defendants, was rewritten in its entirety in 1986. It now provides, in pertinent part: (a) Notice to defendants.— ²⁹ (1) The plaintiff shall show in the title of the complaint the last address known to the plaintiff or to the attorney filing the complaint of each defendant, as obtained from: (i) any records examined as part of the title examination; (ii) the tax rolls of the collector who made the sale, as to the property described in the complaint; and (ii¡) any other address that is known to the plaintiff or the attorney filing the complaint.

(2) Paragraph (1) of this subsection does not require the plaintiff or the attorney for the plaintiff to make any investigations or to search any other records or sources of